Promoting mixed-ownership is a major step in China's latest round of state-owned enterprises reform. The plan aims to diversify companies' businesses and make them more competitive. As an example, the state oil giant China Petroleum and Chemical Corporation, or Sinopec, has expanded its non-fuel businesses, and brought in social and private investors.
A nutritious lunchbox, or some hot ready-to-eat snacks? Sinopec's convenience store has more choices than before. It's a time to unwind while waiting for your car to be refilled.
"It’s convenient. It’s good to eat a steamed stuffed bun while filling up," Customer Xie Xia said.
The change comes after Sinopec decided to expand its non-fuel businesses, which accounted for only 1% of its retail sales.
The oil company now runs 24,000 convenience stores, called ejoy, along with 30 thousand gas stations.
They are cooperating with partners with new products and services, including appliances, delivery, medicine, and even insurance.
"This joint store agreement started operating at the end of last year. The varieties of goods have increased to 1,600 types from about 600. And the daily turnover has increased to over 8,000 yuan from 6,000. That's about 35% growth," Zhou Guohua with Sinopec Oil Products Company said.
Sinopec has sold nearly 30% of its shares in the retail unit to 25 investors, 11 of whom are private companies.
To further boost its performance, the oil giant is now creating a mixed-ownership structure.
Sinopec is at the forefront of China’s reforms to state-owned enterprises, as it probes new ways to increase the value of national assets. The opening-up to social and private investment is expected to inject new vitality to this young yet ambitious company.
Professor Liu, an expert in economics, has been following SOE reforms for years. He welcomes Sinopec's decision to adopt mixed-ownership. But, he says it's management that matters most to a company.
"The mixed-ownership solves the problem of capital combination, but it does not provide solutions to internal management system, and industry distribution. And whether a mixed-ownership is needed or not, it should be based on market demands," Professor Liu said.
Sinopec ranked 2nd in the Fortune 500 list this year. Experts say the joint supervision of investors and regulators allows the company to explore new business models, and move a step closer towards a modern corporate system.